OMV seeks talks with Norway to secure Gazprom deal approval

VIENNA (Reuters) - OMV will seek talks with Norway about the Austrian energy group’s planned asset swap deal with Gazprom in order to address Oslo’s concerns, the chief executive said.

Chief executive of Austrian energy group OMV Rainer Seele poses for a photograph during an interview with Reuters in Vienna, Austria, June 12, 2018. REUTERS/Kirsti Knolle

In 2016, OMV agreed to swap 38.5 percent of its Norway assets for 24.98 percent of the Russian company’s Urengoy gas field. But Norway’s energy minister, Terje Soeviknes, said in May this year he was concerned the deal would give Gazprom access to the Norwegian continental shelf.

“We now have to hold tri-partite discussions and talk to the minister,” Chief Executive Rainer Seele told Reuters on Tuesday.

Talks would take place in mid-July at the earliest, he said in an interview. “I do not even want to think about setting up a date during the World Cup,” the 57-year-old German added.

OMV and Gazprom remained committed to the deal, he said when asked whether an outright purchase of Gazprom’s assets, as suggested by sources, was also an option.

“Should any obstacles arise in the talks with the ministry, then we must discuss with Gazprom how to deal with it,” he said.

Russia is a core region for OMV as production is cheap and transport pipelines to Austria are in place.

The OMV logo is seen at a gas station in Vienna, Austria, June 12, 2018. REUTERS/Heinz-Peter Bader

OMV bought about a quarter of the Yuzhno Russkoye field, one of Russia’s largest gas fields, last year and is one of Gazprom’s construction partners in the Nord Stream 2 pipeline.

Nord Stream 2, which will double Russia’s capacity to pipe gas to Europe, has been criticized by some in the European Union who say it will make the bloc too reliant on Russian gas and strengthen Gazprom’s already dominant position.

Seele said the pipeline would protect European energy security against possible transatlantic interventions.

He also said Russia could be relied on to keep gas flowing as it needed the revenue from European importers. “As long as Russia needs this market, we can manage that wonderfully,” he said.

With more than 80 percent of necessary approvals on the route already granted, Seele said he hoped Denmark would give approval for the pipeline to be built near its coast in the summer.

Regarding OMV’s work in Iran, Seele said the Austrian group planned to conclude seismic studies but would not pursue projects further, after the United States withdrew from a nuclear pact with Tehran and said it would reimpose sanctions.

“Let’s face it, you cannot simply carry on in Iran,” he said. “U.S. sanctions are a much bigger risk for OMV’s business than any possible compensation that Europe ... could offer.”

The European Union signatories to the 2015 nuclear pact with Iran have said they want to keep the deal in place.

OMV started operations in Iran in 2001 as operator of the Mehr exploration block in the west of the country. It halted work in 2006 due to sanctions, but signed several agreements for new projects when the 2015 deal was reached.